Hepion Pharmaceuticals, Inc.

Previous wording

From inception through June 30, 2025, we have an accumulated deficit of $245.0 million, and we have not generated any revenue from operations.

Current wording

From inception through September 30, 2025, we have an accumulated deficit of $245.4 million, and we have not generated any revenue from operations.

Previous wording

During the six months ended June 30, 2025, there were no significant changes to our critical accounting estimates from those described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

During the nine months ended September 30, 2025, there were no significant changes to our critical accounting estimates from those described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

Research and development expenses for the three months ended June 30, 2025 and 2024 was $0.4 million and $7.1 million, respectively. The decrease of $6.7 million was primarily due to a $3.8 million decrease in clinical trial costs primarily for our phase 2b study, $3.1 million decrease in Chemistry, Manufacturing and Controls costs, and $0.1 million in employee compensation costs due to reduced headcounts and other miscellaneous expenses, primarily due to the discontinuation of clinical trials, partially offset by $0.4 million in expense related to purchased in-process research and development from the New Day asset acquisition.

Current wording

Research and development expenses for the three months ended September 30, 2025 and 2024 was $0 million and $2.8 million, respectively. The decrease of $2.8 million was primarily due to a $2.1 million decrease in clinical trial costs primarily for our phase 2b study, $0.4 million in consulting and outside services costs, $0.2 million in employee compensation costs due to reduced headcounts, and $0.1 million decrease in Chemistry, Manufacturing and Controls costs. The Company anticipates an increase in research and development expenses as it pursues the development of assets acquired from New Day.

Previous wording

General and administrative expenses for the three months ended June 30, 2025 and 2024 was $0.9 million and $1.4 million, respectively. The decrease of $0.4 million was primarily due to a $0.2 million in employee salaries due to reduced headcount, $0.1 million in insurance and $0.1 million in professional fees.

Current wording

General and administrative expenses for the three months ended September 30, 2025 and 2024 was $0.5 million and $1.7 million, respectively. The decrease of $1.2 million was primarily due to a $0.4 million in employee salaries due to reduced headcount, and $0.8 million in professional fees.

Previous wording

We had no revenues during the three months ended June 30, 2025 and 2024, because we do not currently have any commercial products. However, with the assets related to the New Day licensing agreement, there are three products that have CE marks and are eligible to be sold in the European Union (“EU”) and certain eligible markets that accept the CE mark, with the notable exception of the United States at the present time but we cannot guarantee when and how much revenue will be generated from those products.

Current wording

We had no revenues during the nine months ended September 30, 2025 and 2024, because we do not currently have any commercial products. However, with the assets related to the New Day licensing agreement, there are three products that have CE marks and are eligible to be sold in the European Union (“EU”) and certain eligible markets that accept the CE mark, with the notable exception of the United States at the present time but we cannot guarantee when and how much revenue will be generated from those products.

Previous wording

Research and development expenses for the six months ended June 30, 2025 and 2024 was $0.4 million and $9.7 million, respectively. The decrease of $9.3 million was primarily due to a $5.9 million decrease in clinical trial costs primarily for our phase 2b study, a $3.2 million decrease of Chemistry, Manufacturing and Controls costs, a decrease of $0.6 million in employee compensation costs due to reduced headcounts, and decrease in consulting and outside services, partially offset by $0.4 million in expense related to purchased in-process research and development from the New Day asset acquisition.

Current wording

Research and development expenses for the nine months ended September 30, 2025 and 2024 was $0.4 million and $12.4 million, respectively. The decrease of $12.0 million was primarily due to a $7.7 million decrease in clinical trial costs primarily for our phase 2b study, a $3.3 million decrease of Chemistry, Manufacturing and Controls costs, a decrease of $0.8 million in employee compensation costs due to reduced headcounts, and a decrease of $0.7 million in consulting and outside services, partially offset by $0.4 million in expense related to purchased in-process research and development from the New Day asset acquisition.

Previous wording

General and administrative expenses for the six months ended June 30, 2025 and 2024 was $2.2 million and $4.0 million, respectively. The decrease of $1.8 million was primarily due to a $0.9 million in employee salaries due to reduced headcount, $0.7 million in employee stock compensation, $0.1 million in insurance and $0.1 million in professional fees.

Current wording

General and administrative expenses for the nine months ended September 30, 2025 and 2024 was $2.2 million and $5.7 million, respectively. The decrease of $3.0 million was primarily due to a $1.5 million decrease in employee compensation due to reduced headcount, a $0.7 million decrease in employee stock compensation, $0.6 million decrease in professional and consulting fees and $0.1 million in insurance.

Previous wording

Asset impairment loss for the three months ended June 30, 2025 and 2024 was $0.4 million and $0 million, respectively. The increase of $0.4 million was primarily impairment expense related to the asset acquired in the license agreement. We tested the asset for impairment during the reporting period, noting there were triggering events related to delayed timing to market resulting in an adverse effect on estimated cashflow over the next two years. Given that the license agreement requires both parties to agree to renewal after the initial two years, we projected the estimated cashflows for the first two years for the assets available for sales in eligible markets, noting the projected cashflow will not be enough to recover the allocated cost in the first two years of the license agreement, resulting in an impairment loss.

Current wording

Asset impairment loss for the nine months ended September 30, 2025 and 2024 was $0.4 million and $0 million, respectively. The increase of $0.4 million was primarily impairment expense related to the asset acquired in the license agreement. We tested the asset for impairment during the reporting period, noting there were triggering events related to delayed timing to market resulting in an adverse effect on estimated cashflow over the next two years. Given that the license agreement requires both parties to agree to renewal after the initial two years, we projected the estimated cashflows for the first two years for the assets available for sales in eligible markets, noting the projected cashflow will not be enough to recover the allocated cost in the first two years of the license agreement, resulting in an impairment loss.

Previous wording

We have no products approved for commercial sale in the United States. However, with the assets related to the New Day licensing agreement, there are three products that have CE marks and are eligible to be sold in the European Union (“EU”) and certain eligible markets that accept the CE mark, with the notable exception of the United States at the present time but we cannot guarantee when and how much revenue will be generated from those products. To date, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, undertaking preclinical studies and clinical trials of our product candidate. As a result, we are not profitable and have incurred losses in each period since our inception in 2013. As of June 30, 2025, we had an accumulated deficit of $245.0 million. We expect to continue to incur significant losses for the foreseeable future.

Current wording

We have no products approved for commercial sale in the United States. However, with the assets related to the New Day licensing agreement, there are three products that have CE marks and are eligible to be sold in the European Union (“EU”) and certain eligible markets that accept the CE mark, with the notable exception of the United States at the present time but we cannot guarantee when and how much revenue will be generated from those products. To date, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, undertaking preclinical studies and clinical trials of our product candidate. As a result, we are not profitable and have incurred losses in each period since our inception in 2013. As of September 30, 2025, we had an accumulated deficit of $245.4 million. We expect to continue to incur significant losses for the foreseeable future.

Previous wording

As of June 30, 2025, we had working capital of $3.9 million compared to working capital deficit of $1.5 million as of December 31, 2024. The increase of $5.4 million in working capital is primarily due to $8.2 million in net proceeds received from equity issuance offset by the $2.9 million related to settlement of a note payable, and the Company’s other operating costs for the three months ended June 30, 2025.

Current wording

As of September 30, 2025, we had working capital of $3.4 million compared to working capital deficit of $1.5 million as of December 31, 2024. The increase of $4.9 million in working capital is primarily due to $8.2 million in net proceeds received from equity issuance offset by the $2.9 million related to settlement of a note payable, and the Company’s other operating costs for the nine months ended September 30, 2025.

Previous wording

As of June 30, 2025, we had $2.9 million in cash. Net cash used in operating activities was $2.5 million for the six months ended June 30, 2025 consisting primarily of our net loss of $7.1 million, adjusted non-cash charges of $5.8 million, including $20,783 for stock-based compensation, and $4.1 million in change in fair value of derivative warrants. Changes in working capital accounts had a positive impact of on cash primarily due to a decrease in accounts payable and accrued expenses.

Current wording

As of September 30, 2025, we had $2.3 million in cash. Net cash used in operating activities was $2.9 million for the nine months ended September 30, 2025 consisting primarily of our net loss of $7.6 million, adjusted non-cash charges of $4.6 million, including $0.4 million for asset impairment, and $4.1 million in change in fair value of derivative warrants. Changes in working capital accounts had a positive impact of on cash primarily due to a decrease in accounts payable and accrued expenses.

Previous wording

As of June 30, 2024, we had $2.1 million in cash. Net cash used in operating activities was $14.5 million for the six months ended June 30, 2024 consisting primarily of our net loss of $9.9 million, adjusted for an increase in non-cash charges of $3.2 million, primarily for stock-based compensation and warrant related inducement expense, partially offset by $3.1 million in change in fair value of contingent consideration and the change in fair value of derivative warrants. Changes in working capital accounts had a negative impact of $4.6 million on cash primarily due to an increase in accounts payable, accrued expenses and prepaid expenses.

Current wording

As of September 30, 2024, we had $0.8 million in cash. Net cash used in operating activities was $17.1 million for the nine months ended September 30, 2024 consisting primarily of our net loss of $11.6 million, adjusted for an increase in non-cash charges of $3.8 million, primarily for stock-based compensation, amortization of debt discount, and warrant related inducement expense, partially offset by $6.5 million in change in fair value of contingent consideration and the change in fair value of derivative warrants. Changes in working capital accounts had a negative impact of $2.7 million on cash primarily due to an increase in accounts payable, accrued expenses and prepaid expenses.

Previous wording

Net cash used in investing activities was $0.1 million for the six months ended June 30, 2025 related to the acquisition of licenses from New Day Diagnostics.

Current wording

Net cash used in investing activities was $0.1 million for the nine months ended September 30, 2025 related to the acquisition of licenses from New Day Diagnostics. Net cash used in investing activities was $600,000 for the nine months ended September 30, 2024. The $600,000 in 2024 was primarily due to the note receivable from Pharma Two B.

Previous wording

Net cash provided by financing activities was $5.3 million for the six months ended June 30, 2025, due primarily to proceeds received from the exercise of the warrants and equity issuance offset by $2.9 million payment on notes payable.

Current wording

Net cash provided by financing activities was $5.0 million for the nine months ended September 30, 2025, due primarily to proceeds received from the exercise of the warrants and equity issuance offset by $3.2 million payment on notes payable.

Previous wording

Net cash provided by financing activities was $1.8 million for the six months ended June 30, 2024, due primarily to proceeds received from the exercise of the warrants.

Current wording

Net cash provided by financing activities was $4.3 million for the nine months ended September 30, 2024, due primarily to proceeds received from the exercise of the warrants and equity issuance.